IT outsourcing is big business but if you talk to IT workers you are left wondering how?
The IT outsourcing sector in the UK was worth £41.7bn in 2009, according to research from Oxford Economics. This was about 20% of the total UK business outsourcing sector which was worth £207bn. In total outsourcing accounted for 8% of UK GDP that year.
But if IT workers had anything to do with it the sector would not be that big. I was at a housewarming party yesterday (22nd May) and I met three IT professionals. They wern’t drunk by the way and neither was I.
One of the IT professionals, who actually works for a service provider, said he doesn’t understand why businesses outsource so much. He said he doesn’t think an outsourced worker will ever give you the commitment of an insourced worker.
He said workers from suppliers will not go the extra mile for the client. He used an analogy of a broken TV to get his point across.
“OK, see that TV. The client asks me to put a new plug on it. So I do just that. Although I notice that the wire is faulty I just do what is requested. It is not in my interest to do it at the same time because that will be another job later. But if I was an in-house worker I would do both jobs in one go,” he told me.
A survey recently carried out at the recent Infosecurity Europe event, by automation software maker Lieberman Software, found that not only were IT outsourcing contracts costing more than expected but three quarters of those interviewed think that outsourced service providers were creating work unnecessarily.
Then there were two IT professionals from a major corporate at the party. They said they would not outsource any core business IT work. This also made me think of a meeting I recently had with Cognizant’s global head of business consultancy. He said as a result of technology advances a lot of processes are no longer core and having a unique system is not necessarily a real advantage.
So outsourcing suppliers have to be able to demonstrate to their potential customers why certain elements of their business are not core. This is potentially where business consultancy arms within IT service providers could add value.
But back to the point of this post. How has IT outsourcing become so big despite clear doubts about its effectiveness.